I am confused why a government run program is able to be sold. Please explain like I am 5 how selling medicare is a thing. Why would a government run program need to be sold? Thanks
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They’re not selling Medicare itself, they’re selling usually either supplemental coverage plans, or selling Medicare Advantage products (private plans following Medicare rules).
Health Insurance plans do not sell Medicare, they sell Medicare Advantage. Medicare Advantage is the private version of Medicare which by default has to provide as much coverage as the government provided Medicare (or better).
The advantages to Medicare Advantage are that they typically offer lower cost shares than under traditional medicare and with added coverages that aren’t covered under medicare at all (Rx, over the counter drugs, dental, vision). The main disadvantage is that the way that in order to be able to get those savings typically they restrict the provider networks.
There are also Medicare Supplemental plans which really all they do is lower cost shares but they tend to cost a lot more than Medicare Advantage plans while not providing any additional coverage (no Rx coverage, etc). The main advantage of these is that you get the same network as Medicare with lower cost shares.
Government Medicare itself only covers certain things. If you ever see commercials for “Plan C” or D or whatever, it’s because the government only offers what’s called “Plan A” and “Plan B” coverage. Plan A = hospitalizations, skilled nursing, hospice, home health, preventative care. Plan B = certain medicines, ambulance services, medical equipment, “preventative services”, and mental health inpatient and outpatient care.
If you want dental care, cosmetic surgery, routine physicals, vision, medicine not covered by part B, other care not provided by plan A or B, etc. you’ll need to buy supplementary insurance. You have to have Medicare to qualify for these supplementary Part C or D plans. What you hear on TV are adds for people on Medicare who want additional coverage beyond Part A and B.
The reason for this setup is because QUALITY healthcare is NOT cheap and the government cannot realistically pay for every medical service ever for every aged and disabled person in America. Especially now more than ever, America’s Boomers are all aging at the same time, and as their children also age, it’s expected by 2060 25% of the population will be 65+. Bear in mind Medicare is also for people with disabilities, which according to CDC is (up to) 27% of the population… So the private market and government have to work together on creative, AFFORDABLE solutions for insurance. For people out of the loop , it can look very sloppy and disjointed but this the reason.
This site might be helpful for more of a breakdown: [https://www.medicare.gov/what-medicare-covers/whats-not-covered-by-part-a-part-b](https://www.medicare.gov/what-medicare-covers/whats-not-covered-by-part-a-part-b)
I think the other replies answered why you buy Medicare advantage plans, but not why they were sold in the first place.
Medicare contracts with private insurance companies offering Medicare advantage plans – these private companies are paid a fixed amount each month by Medicare to service your plan, which is supposed to be ran in accordance with traditional medicare guidelines.
Medicare does this because they don’t make money off their plans, unlike private insurance. So they are happy to offload their plans.
Obviously there’s going to be some corners cut somewhere to make purchasing the rights to these plans profitable. One method is by restricting care to in network providers with lower contracted rates than would be paid to non contracted providers. Another is finding as many reasons as possible to deny claims for clerical errors and forced pre-authorization and denials for many services that would normally be covered.
This has gotten them into hot water:
https://www.propublica.org/article/cigna-health-insurance-denials-pxdx-congress-investigation
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